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I am currently a US citizen/resident, who found out that I can acquire Italian Citizenship jure sanguinis. Before I actually go through with this, I wanted to make sure I wouldn't be burdening myself, with a tax liability, by doing so.

My question is, that since I would not be living in Italy, do I have to pay taxes to the Italian government, on top of the ones I already pay as a US citizen/resident?

I know the United States taxes on citizenship, and states tax residency, but it's difficult for me to find information on whether Italy taxes on citizenship, as an Italian-living-abroad.

  • Jus sanguinis for Italian citizenship happens automatically at birth. You are either an Italian citizen, and have been since birth, or you are not. What you are talking about is getting proof of that citizenship, but that doesn't affect whether you have it or not. Tax liability only potentially depends on whether you're an Italian citizen, which is not technically affected by whether you apply for proof of it. – user102008 Jun 24 '14 at 2:59
  • jus sanguinis citizenship (at least for Italy) is defined also by the ancestor line, not only the parents. for example grandparents are italians, parents have only US citizenship, the son has US citizenship by birth but can apply to Italian citizenship by Jus Sanguinis. – Guido Preite Jun 26 '14 at 8:12
  • Denmark is also one of the countries there tax their citizens living outside Eu as if they were living in Denmark. At the same time Denmark take away all rights eventhe right to vote – user4893 Jan 1 '15 at 1:42
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Most countries don't tax their citizens, only their residents. The most notable exception is the US. In the EU countries however you only need to pay tax if you are a resident there. More specifically in Italy:

  • If you live in Italy for more than 183 days in a year, or your life is centered in Italy and you are in the Population Registry: You must pay tax on your worldwide income there.
  • If you don't live in Italy for more than 183 days in a year: you pay tax only on the income you earned in Italy.

As you are not going to be a resident in Italy, you won't have to pay taxes in Italy, except for potential income you earn from Italy (which you didn't state). For the latter there might be double taxation agreements with the US though, so you might not need to pay (fully) on those incomes (although tax treaties usually exclude citizens for most provisions).

You will however get EU citizenship, which will allow you to enter and move freely inside EU and some other European countries.

  • 2
    Not "Most countries", "All the countries except the US". US is the only country that taxes its citizens on their whole worldwide income regardless of residency. – littleadv Jun 23 '14 at 2:44
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    @littleadv US is the only developed country doing that. As far as I know some non-developed countries do the same, like Eritrea – SztupY Jun 23 '14 at 8:04
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    @littleadv well, according to the article you linked the tax still exists (at least from the standpoint of the Eritrean Government), and while it's different to the US one, it still taxes your income in some way. Personally I don't see it that different to the US one, as when you try to renew your US passport the IRS can be notified, which can cause trouble for you. The fact that one is banned by the UN, but the other not... that's probably only on-topic on chat – SztupY Jun 23 '14 at 8:55
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    @SztupY well... My country demands payment for a passport renewal as well, but I can hardly compare it to the US predatory taxation. The point is that the US is the only country in the world that taxes its citizens irrespective of residency. There may be countries who have special taxes for non-resident citizens (and really, 2% diaspora tax can hardly compare to the 30% US income tax), but US is the only one that just ignores residency of its citizens in its entirety. – littleadv Jun 23 '14 at 8:57
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    @littleadv: US is the only one having a rule explicitly stating so, but AFAIK in other countries it's kind of implied, that unless there is bilateral agreement on double taxation avoidance between the countries, the personal income would still be taxed in country of your nationality. Thing is that most developed countries have these bilateral agreements. – vartec Jun 23 '14 at 10:00
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I'm Italian and I moved to the UK two years ago. As Italians, if we permanently reside in a foreign country we don't pay taxes on what we earn abroad. There are taxes to pay if you own a property in Italy, but that's a different story, of course. As citizens, if we plan to move abroad for longer than a year, however, the Italian law imposes that we sign up the AIRE (Anagrafe Italiani Residenti Estero). By doing so we formally lose our Italian residency and some rights, such as using the National Health Service (I guess that's fair enough, considering we no longer finance that service with our taxes).

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    this is the correct answer. for Italians the criteria is to be registered at AIRE AND to be outside the country more than half year. If an Italian stays more than half year outside Italy but is not registered at AIRE he must pay taxes as he lived in Italy all the time. – Guido Preite Jun 26 '14 at 8:15
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Beware that if you have a pension from the Italian Government like a INPS pension, INPS will withhold taxes, even if you have to pay full taxes in the country in which you reside. Despite the tax treaty between the US and Italy, persuading INPS to stop withholding requires getting a lawyer!! I am an Italian citizen living now in the US. The US will not give me credit for taxes withheld by the Italians on my Italian pension because there is no document showing that the tax was owed to the Italian government. The yearly form I receive (the CU) only shows that tax was withheld.

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